Blood Money: These Companies and People Make Billions of Dollars From War

War against a foreign country only happens when the moneyed classes think they are going to profit from it. – George Orwell

The late United States Marine Corps Major General Smedley D. Butler is perhaps most famous for his post-retirement speech titled “War is a Racket”. In the early 1930s, Butler presented the speech on a nationwide tour. It was so popular that he wrote a longer version as a small book that was published in 1935.

Butler points to a variety of examples, mostly from World War I, where industrialists whose operations were subsidised by public funding were able to generate substantial profits essentially from mass human suffering.

“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”

In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few — the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.

For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it. Now that I see the international war clouds gathering, as they are today, I must face it and speak out.

Butler also exposed the Business Plot, an alleged plan to overthrow the U.S. government. In 1933, Butler told a congressional committee that a group of wealthy industrialist businessmen (including individuals from General Motors, Prescott Bush, grandfather of George Bush Jr., J.P. Morgan, and the Rockefeller dynasty) were planning a military coup to overthrow President Franklin D. Roosevelt, with Butler selected to lead a march of veterans to become dictator, similar to other Fascist regimes at that time. The individuals involved all denied the existence of a plot, and the media ridiculed the allegations, calling them a “gigantic hoax.”

A final report by a special House of Representatives Committee confirmed some of Butler’s testimony.

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Despite warnings of its existence and imminent expansion, the military-industrial complex (or military-industrial-congressional complex) remains in operation today. It is an iron triangle that comprises the policy and monetary relationships which exist between legislators, national armed forces, and the arms industry that supports them. These relationships include political contributions, political approval for military spending, lobbying to support bureaucracies, and oversight of the industry.

Arms sales, including advisory, planes, vehicles, and weapons, were defined by sales to military customers as well as contracts to government militaries. Also considered were each company’s 2013 total sales and profits, the total number of employees at the company, as well as nation-level military spending, all provided by SIPRI.

From the article:

U.S. companies still dominate the arms market by a large margin, with six among the top 10 arms sellers. In the top 100 arms-producing companies, 39 are based in the United States, and U.S. companies accounted for more than 58% of total arms sales among the top 100. U.S. company arms sales in the top 10 alone made up 35% of total arms sales among the top 100. By contrast, Western European companies, which make up the rest of the top 10 arms producers, accounted for just 28% of the total top 100 arms sales.

Here are the top 10 war-profiteering companies and their political ties.

United Technologies might be the lowest ranking of the U.S. companies in this list, but don’t let that fool you. OpenSecrets bestowed the company with the label “heavy hitter”, which means it is “one of the 140 biggest overall donors to federal elections since the 1990 election cycle, as compiled by the Center for Responsive Politics.”

The total of contributions to candidates from Airbus Group PACs is 4 times larger than contributions from individuals.

REVOLVING DOOR: 42 out of 57 Airbus Group lobbyists in 2013-2014 have previously held government jobs.

6. General Dynamics (U.S.)

Arm sales 2013: $18.7 billion, profit $2.4 billion

OpenSecrets labeled this company a “heavy hitter”, which means it is “one of the 140 biggest overall donors to federal elections since the 1990 election cycle, as compiled by the Center for Responsive Politics.”

General Dynamics is one of the nation’s top defense contractors, assembling virtually every type of military machinery engaged in modern combat. The company builds warships, nuclear submarines, tanks and combat jets, not to mention the command and control systems that link all of these technologies together. The company has lobbied hard to encourage lawmakers to step up appropriations for the Navy, one of the company’s biggest clients.

It has fought attempts to shrink the nation’s fleet of submarines and warships, thereby helping block Defense Department attempts to shift that money to other facets of the nation’s land and air defenses.

The total of contributions to candidates from General Dynamics PACs is 6 times larger than contributions from individuals.

6 Congressional members own shares in this company (click here for the list).

REVOLVING DOOR: 96 out of 133 General Dynamics lobbyists in 2013-2014 have previously held government jobs.

CEO Phebe Novakovic earned nearly $19 million in total compensation in fiscal 2014.

5. Northrop Grumman (U.S.)

Arm sales 2013: $20.2 billion, profit $2 billion

We’ve got another heavy hitter here:

Northrop Grumman is the fourth largest defense contractor and the world’s largest builder of naval vessels as of 2010. As a member of the miscellaneous defense industry, Northrop Grumman specializes in aerospace systems, electronic systems, information systems, ship building and technical services.

Northrop Grumman focuses much of its efforts securing government defense contracts and earmarks. During the 2008 election cycle, people and political action committees associated with Northrop Grumman contributed more than $2 million to federal candidates and committees, favoring Democrats slightly.

The total of contributions to candidates from Northrop Grumman PACs is 9 times larger than contributions from individuals.

REVOLVING DOOR: 32 out of 49 Northrop Grumman lobbyists in 2013-2014 have previously held government jobs.

6 Congressional members own shares in this company (for the list, click here).

CEO Wesley G. Bush’s total pay package, including the change in the value of his pension, was $18.6 million in 2013, reports The Washington Post. His salary and stock awards remained steady at about $1.5 million and $8 million, respectively.

4. Raytheon (U.S.)

Arm sales 2013: $29.9 billion, profit $2 billion

OpenSecrets has identified Raytheon as a heavy hitter:

Raytheon is a major American defense contractor that specializes in defense and homeland security technology. As the world’s largest producer of guided missiles, Raytheon specializes in manufacturing defense systems and defense electronics.

A member of the defense electronic industry, Raytheon is most active lobbying on defense, homeland security and federal budget appropriation issues. Until 2008, individuals and political action committees associated with Raytheon had favored Republicans in campaign contribution giving, but after Democrats won both chambers of Congress and the White House, the defense firm favors Democrats, giving 55 percent of campaign contributions to Democrats and 45 percent to Republicans in 2008. Considering that access is needed when securing large government defense contract, it’s of little surprise that Raytheon spends millions of dollars each year lobbying the federal government. Raytheon is the primary manufacturer of Tomahawk cruise missiles, dozens of which have been used by U.S. and British military forces in strikes against targets in Libya during 2011.

Boeing is the world’s top manufacturer of commercial airplanes, including well-known aircraft such as the 787 and the 747. The company is also a leading military supplier, making fighter-bombers, transport planes and the Apache helicopter.

Along with rival Lockheed Martin, the company regularly lobbies Congress to win military contracts and increase defense spending. Boeing is a major supporter of free trade, especially in Asia, where it has focused on selling more planes. The company also lobbies on environmental rules and transportation regulations, among other issues. Boeing is also a large recipient of government loan-guarantees, primarily coming from the Export-Import Bank of the United States.

CEO W. James McNerney Jr. made $23,263,562 in total compensation in 2013. Of this total $1,930,000 was received as a salary, $12,920,972 was received as a bonus, $3,763,503 was received in stock options, $3,763,534 was awarded as stock, and $885,553 came from other types of compensation. He earned $23.5 million total in 2014.

1. Lockheed Martin (U.S.)

Arm sales 2013: $35.5 billion, profit $3 billion

As the top war profiteer on this list, it should be no surprise that Lockheed Martin is ranked as a heavy hitter by OpenSecrets:

Lockheed Martin is the nation’s top defense contractor, the brains behind such high-tech military hardware as the F-16 jet fighter and a variety of land and sea missiles. In 2001, the company landed the biggest defense contract in history when it was named the main contractor for the Joint Strike Fighter.

Considering that access is the name of the game when securing such lucrative contracts, it’s no surprise that Lockheed splits its campaign money equally between Democrats and Republicans. All told, NASA and the Defense Department account for roughly 80 percent of the company’s annual sales.

The total of contributions to candidates from Lockheed Martin PACs is 7 times larger than contributions from individuals.

REVOLVING DOOR: 69 out of 109 Lockheed Martin lobbyists in 2013-2014 have previously held government jobs.

CEO Marillyn Hewson earned $25.16 million in 2014. Of this total, $1.34 million was base salary, $8.16 million was stock awards, $5.98 million was from incentive plan compensation, $9.41 million was in pension earnings, and other compensation was $238,150.

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As you can see, many companies and individuals – including politicians – stand to profit greatly from perpetual war.

And we, the taxpayers, are footing the bill.

Every hour, taxpayers in the United States are paying $312,500 for cost of military action against ISIS.

Every hour, taxpayers in the United States are paying $10.17 million for cost of war in Afghanistan.

Every hour, taxpayers in the United States are paying $365,297 for cost of war in Iraq.

Every hour, taxpayers in the United States are paying $10.54 million for total cost of wars since 2001.

Every hour, taxpayers in the United States are paying $8.43 million for Homeland Security Since 9/11.

Every hour, taxpayers in the United States are paying $58 million for the Department of Defense.

For a live ticker showing how much we have paid to date in each of the categories above, please visit the National Priorities Project site. You also can use the site’s trade-off tool to see what else those dollars could buy.

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The full costs of war cannot simply be measured in dollars. It is impossible to place a monetary value on the tremendous loss of life (both military and civilian) caused by perpetual war.

Since 2003, U.S. military deaths in Afghanistan total 2,356. UK military deaths total 453, and there have been 677 coalition military deaths from other countries.

Since 2003, U.S. military deaths in Iraq total 4,489. UK military deaths total 179, and there have been 140 coalition military deaths from other countries.

In Iraq, 1,487 contractor employees have died. 348 journalists have been killed. 448 academics have died.

To view information on 6,840 U.S. service members who have perished in Afghanistan and Iraq, please see Faces of the Fallen.

Deaths don’t only occur in combat. An unusually high percentage of young veterans have died since returning home, many as a result of drug overdose, suicide, and vehicle crashes, reports Costs of War. The suicide rate doubled in the Army during the first decade of the wars among both the deployed and the non-deployed.

In many ways, the people of Afghanistan and Iraq are worse off now than they were before U.S. military invasion. Both countries are considered more authoritarian, more corrupt, and more repressive than they were before.

In the George Orwell classic 1984, there is a state of perpetual war between the nations of Oceania, Eurasia and Eastasia. The enemy in the conflict is ambiguous, and the battlefield exists in an elusive and distant land. The enemy could be Eurasia one day, and Eastasia the next, but that location is really insignificant.

The mission of perpetual war for these superpowers is to justify psychological and physical control over their populations, to keep their people busy, fearful and hateful towards the enemy. The perpetual war also serves as an excuse for a nation’s failings and shortcomings. The economy, the labor force and industry are all centered around war rather than consumer goods. People live a miserable existence with poverty and no hope of improving their standard of living.

Love points out that there are bigger problems we should be concerned about:

…there are many domestic threats that seem to pose a greater risk to national security, including the U.S. economic system itself.

He concludes with:

If we are to have a perpetual war, it must be a war against injustice and deprivation at home and abroad. We need to get our own house in order, rather than demolish and rebuild other nations that did not invite us there. And as far as the so-called terrorism problem is concerned, maybe we should stay out of other folks’ backyards and it will go away.

Indeed, the authorities would like us to believe that “fighting for our freedoms” in lands thousands of miles away is a necessary evil.

In War is a Racket, Butler suggested the following three steps to smash the war racket:

We must take the profit out of war.

We must permit the youth of the land who would bear arms to decide whether or not there should be war.